Question

Ngu owns equipment that cost $104,300 with accumulated depreciation of $71,200. ngu asks $37,700 for the equipment but sells the equipment for $34,800. compute the amount of gain or loss on the sale

Answer 1

Gain on sale of equipment = $1700 By Extracting Information.

The gain or loss on sale of an asset used in the business is the difference between 1) the amount of cash received by the business and 2) the carrying value (book value) of the asset at the time of sale.

The disposal account is the profit or loss account shown in the income statement that records the difference between the proceeds of disposal and the net book value of the asset being sold.

A gain on sale of assets arises when an asset is sold in excess of its carrying amount. Carrying value is the purchase price of an asset less subsequent depreciation and impairment losses. Profit is classified as a non-operating item on the sales company's income statement.

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